European Companies Rise, Trump's New Tariffs, Company News and Geopolitics
Stock market news
• US stock indices ended the day at zero. The XLC and XLY sectors were weak. UNH and AVGO also stood out with a fall. But the influx of liquidity was noticeable in mid-cap stocks, which pulled RSP up by 0.8%. The yield on 10-year government bonds rose slightly to 4.55%, pressing TLT by 1%. The US dollar is stable. Everything is calm in the morning. Bitcoin fell almost to $93 thousand, but in the morning it returned above $95 thousand - here we can see profit-taking by long-term players, but trading volumes are falling.
• Despite Wall Street stocks lagging global markets this year, the S&P 500 still managed to hit another record high on Tuesday, amid fresh tariff threats, housing news and Federal Reserve minutes due later today. A confusing and turbulent start to the year has seen global investors shift their focus away from expensive U.S. stocks and toward cheaper European stocks and Chinese tech companies, with talks this week to end the war in Ukraine and elections in Germany this weekend spurring interest in the former.
• The rapid shift in portfolio allocations and mutual fund flows this year is striking, but so is the shift in economic news relative to some extreme expectations.
Citi’s economic surprise indices show the eurozone index at its most positive in eight months, while its U.S. equivalent has slipped back into negative territory, with the gap between the two the most favorable for Europe since July. Still, these are all relative numbers, and — for now, at least — the still-upbeat picture of global activity lifts all boats. And that has allowed U.S. indices to continue to rise even as global investment portfolios rebalance.
• U.S. stock futures were lower on Wednesday. The hot-button geopolitical issues of the moment remain in play today, with U.S. President Donald Trump again threatening to impose 25 percent tariffs on cars, medicine and chips, and tensions rising over contentious Ukraine talks. Washington’s decision to bypass Ukraine and talk directly with Russia to end the war has raised serious concerns that the deal could overthrow the Kyiv government. While Europe is fuming over Ukrainian President Volodymyr Zelensky’s absence from the Saudi Arabia talks, EU leaders are now bracing for heightened security risks ahead, pushing for more defense spending and finding ways to fund it.
• Markets are trying to price in the shift, with European defence stocks rising this week and talk of higher government spending in Germany after the weekend election encouraging bets on a wider reset for the euro bloc. Talk of a rapid defence boost has also fuelled talk of another round of joint European borrowing, similar to that seen during the post-pandemic recovery.
This has led to a further rise in German bond yields, as well as a narrowing of the risk spread between Germany and other eurozone sovereign bonds. Italy's 10-year spread has reached its narrowest in 3.5 years, while France's recently elevated spread has returned to its lowest since July.
• The euro fell on Wednesday, partly as Trump’s renewed tariff threats pushed the dollar and U.S. Treasury yields higher. Gold prices jumped to another all-time high on trade and military tensions and incoming inflation news. Spot gold hit an all-time high of $2,946.75 an ounce, its ninth record this year. Bond yields around the world also worsened on a series of disappointing inflation reports.
• Similar to the hot US consumer price inflation report released last week in January, Canada and the UK also saw better-than-expected annual CPI growth last month, with the UK inflation rate rising back to 3%. Sterling strengthened to its highest level since January 2 against the euro and UK government bond yields rose on Wednesday as hopes for a quicker easing trajectory from the Bank of England were dampened.
Despite this, the Reserve Bank of New Zealand did not feel the squeeze overnight and cut its key rate by 50 basis points to 3.75%, indicating that borrowing costs are falling further as inflation in the country eases. The New Zealand dollar remained steady after an expected move.
• On Wall Street, the biggest events are home starts and the minutes from the latest Federal Reserve meeting, with earnings season still in full swing.
• Another day, another wave of threats from the “tariff man.” This time on pharmaceutical and semiconductor imports, which investors seem to have taken in stride for now, expecting the latter measure to also be used as a negotiating tool. U.S. President Donald Trump said industry-specific tariffs on pharmaceuticals and semiconductor chips would start at “25% or higher, and they’ll go up significantly over the course of the year.” He intends to impose similar tariffs on cars as early as April 2.
Trump, the self-proclaimed “tariff man,” has been touting his intentions to impose tariffs for months, so some of the news may have been priced in. And while investors remain wary, they are looking beyond the easing of tariff concerns.
• A stunning start to the year in European stock markets is in focus, with the pan-European STOXX 600 index closing at a record high on Tuesday, extending its 2025 gains to nearly 10%. Futures point to a muted open. Growing chances of increased military spending in Europe amid peace talks to end the Russia-Ukraine conflict have helped boost defence stocks this week, and with no resolution in sight, the sector could be on track for a ninth straight session of gains.
• Leading iron ore producer Rio Tinto <RIO.AX>'s earnings report will be the biggest event in corporate news during the European hours as investors look to Rio for details on how it will navigate a turbulent world of tariffs. BHP, the world's biggest listed miner, on Tuesday warned of risks to global growth from potential trade tensions as it posted its weakest first-half profit in six years.
• Data on Tuesday showing a pick-up in UK wage growth underlined why the Bank of England has been cautious about cutting interest rates despite broader economic weakness, leaving sterling well supported near a two-month peak. The pound rose 1.8% in February and is set to snap a three-month losing streak amid dollar weakness.
• Google's head of Web3 said the company is working on improving crypto wallets. "Our goal is to allow users to sign into wallets through Google and trade cryptocurrency."
• Apple is preparing an iPad Fold - the brand's first foldable device. An insider at Digital Chat Station reported that Apple is working on a foldable iPad.
The main screen is 7.74" (folds inward), the external display is 5.49". New Face ID system with metal lenses.
In fact, this is an analogue of Fold-type smartphones, but in iPad format. Nothing is known about the launch date yet, but Apple is betting big on this product. Something is wrong with innovations in Apple without Steve Jobs.
• Nike (NKE) to launch new women's fitness brand with Kim Kardashian Skims Product innovation and a return to athletic roots have been at the forefront of Hill's mission to revive Nike's sales.
• Investors started buying up emerging markets in January, report says. Investors poured $45 billion into emerging market debt and bought $2 billion worth of Chinese stocks in January, according to a report from the Institute of International Affairs.
• Intel (INTC) shares rose 16% yesterday, up more than 40% in just six sessions. The gains came amid speculation that TSMC might be considering a bigger stake in Intel's manufacturing business. They were given a boost by the idea that Broadcom might be interested in Intel's chip design and marketing business.
• Honda (HMC) and Nissan merger talks could resume on one condition. The FT reports that Honda wants to fire Nissan CEO Makoto Uchida.
• Elon Musk's Grok 3 is impressive. But early reactions show OpenAI is still ahead. Elon Musk has said that SpaceX plans to send Starship rockets to Mars in three years, and not just any rocket, but with Optimus robots and the AI Grok on board.
• Zuckerberg (META) announced the first ever conference for AI developers called “LlamaCon” to take place on April 29.
• Baidu (BIDU) revenue falls as competition among Chinese AI firms intensifies. Baidu reported a smaller-than-expected revenue drop, easing concerns that its internet search and artificial intelligence businesses are facing stiff competition.
• Oil rises as OPEC+ again considers delaying output hike - Bloomberg
• MicroStrategy (MSTR) cut 21% of its workforce in 2024 as its bitcoin holdings more than doubled. It had 1,534 employees as of Dec. 31. And even that's a lot - it probably only takes a few people to buy and hold bitcoin.
The number of bitcoins on the balance sheet increased in 2024 from 189,150 to 447,470.
In 2025, MicroStrategy spent approximately $3.2 billion to buy 31,270 bitcoins at a volume-weighted average price of $101,232.
As of February 17, the company said it owned 478,740 bitcoins, which were purchased for a total of $31.1 billion at an average price of $65,033. At current prices, this asset would be worth about $45 billion, with MSTR's market cap at $86 billion.
Michael Saylor's Strategy is raising another $2 billion to buy BTC. This strategy will clearly be either a mega-success or a mega-failure.
• Dell is expected to provide lower guidance next week, but AI servers remain a bright spot. DELL shares rose 5% yesterday.
• Ackman is upping his game on Howard Hughes (HHH), promising to build a modern-day Berkshire Hathaway. HHH shares rose 7% yesterday, and are down 5% in premarket trading. Ackman's Pershing Square Holdco announced that it has made a $90-per-share offer to Howard Hughes' board to acquire 10 million newly issued shares of the company's common stock (a dilution rather than a buyout, which is what sent HHH's shares tumbling premarket).
Pershing Square now owns 37.6% of Howard Hughes' outstanding shares. If HHH accepts Pershing Square's offer, Ackman's stake would rise to 48%.
"If the deal goes through, I will be chairman and CEO, Ryan Israel will be CIO, and Ben Hakim will be president, and we will put all of Pershing Square's resources at HHH's disposal to create a diversified holding company, or a modern-day Berkshire Hathaway." Ackman seems to be haunted by Buffett's laurels. Especially since the latter is already 94 years old.
After reports
EQT +1%
OXY -1%
CDNS -4%
CSGP -4%
ANET -5%
TOL -6%
Key events that should provide more guidance for U.S. markets later Wednesday:
- U.S. housing starts/permits for January, NY Fed's February services sector survey.
- Federal Open Market Committee releases minutes of Jan. 28/29 meeting; Fed Vice Chairman Philip Jefferson speaks.
- U.S. corporate earnings: Analog Devices, ANSYS, American Water Works, Garmin, Progressive, Cadence Design Systems, Texas Pacific, CF Industries, Nordson, Charles River, Host Hotels & Resorts, Trimble, etc.
- U.S. Treasury sells $16 billion in 20-year notes.
Fundamental news
• Senate Republicans push through $340 billion budget bill that funds Trump's deportations and border wall
$175 billion for border security, including funding mass deportation operations and building a wall along the U.S.-Mexico border
$150 billion to increase Pentagon defense spending
$20 billion for the Coast Guard
$4.5 trillion in tax cuts could be part of a separate bill (they're continuing the 2017 tax cuts)
"These bills that they've introduced are all about giving tax breaks to their billionaire buddies and making you, the average American, pay for it," Senate Democratic leader Chuck Schumer said.
/ The battle over the U.S. budget continues.
Kazakhstan and Hungary have agreed on oil supplies and joint energy projects - the Ministry of Energy of Kazakhstan after a meeting between Energy Minister Almasadam Satkaleyev and Hungarian Minister of Foreign Economic Relations and Foreign Affairs Peter Szijjarto.
The parties agreed on test deliveries of Kazakh oil to Hungary via the Druzhba pipeline in 2025.
Mass protests against Donald Trump and Elon Musk in the US
People are protesting against undemocratic rule and mass layoffs of civil servants.
/ Unemployment is growing rapidly in Washington. Are officials protesting?
Pro-Russian hackers attacked the Italian Foreign Ministry and Milan airports
In total, about 10 official Italian Internet resources were disabled, as well as the websites of several banks, Reuters reports. The hacker group Noname057(16), which claimed responsibility for the attack, called it "a well-deserved response to Russophobes."
U.S. builder sentiment falls to five-month low on tariff costs - Bloomberg
Trump signals 25% tariffs on autos, semiconductors, pharmaceuticals from April 2
/ Massing toward Trump-style talks.
Fed's Daly:
We don't want to rush into a decision we'll regret.
We want to make sure there's enough pressure on inflation before we cut rates again. We also don't want to hurt the labor market.
UK bankruptcies rise to 16-year high
Corporate bankruptcies have risen to a 16-year high as executives cave in to tax raid, official data show Rachel Reeves.
Brazil to join OPEC+ oil exporters
Brazil is the world's seventh-largest oil producer, pumping about 4.3 million barrels a day, or 4% of global output.
The non-OPEC United States is the world's largest producer, pumping nearly 22 million barrels a day, while Saudi Arabia, OPEC's largest producer, pumps about 11 million barrels.
/ Brazil strengthens OPEC+.